Administrative Appeals Tribunal Annual Report 2015–16 · 2016-10-12 · Financial Statements 65...

FINANCIAL STATEMENTS

60 Administrative Appeals Tribunal // Annual Report 2015–16

Financial Statements 61


for the period ended 30 June 20162016 Original Budget

Notes $'000 $'000NET COST OF SERVICESExpenses

Employee Benefits 1.1A 94,316 101,112 Suppliers 1.1B 32,160 28,667 Depreciation and amortisation 3.2A 7,404 5,671 Losses from asset sales 15 -

Total expenses 133,895 135,450 Own-Source IncomeOwn-source revenue

Sale of Goods and Rendering of Services 1.2A 743 1,177 Other Revenue 1.2B 102 -

Total own-source revenue 845 1,177

GainsOther Gains 1.2C 1,442 1,379

Total gains 1,442 1,379 Total own-source income 2,287 2,556 Net cost of services (131,608) (132,894)Revenue from Government 1.2D 123,529 127,223 Deficit (8,079) (5,671)

OTHER COMPREHENSIVE INCOMEItems not subject to subsequent reclassification to net cost of services

Changes in asset revaluation surplus 1,053 -Total other comprehensive income after income tax 1,053 -

Statement of Comprehensive Income for not-for-profit Reporting Entities

Statement of Comprehensive Income

The above statement should be read in conjunction with the accompanying notes.

Budget Variances Commentary

Variances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Statement of Comprehensive Income, they are total expenses or total revenue.

The variance against Suppliers predominantly relates to price increases and increased accommodation costs as a result of changes to accommodation project timelines for co-location in Sydney and Perth. This was not anticipated at the time of developing the budget.

The variance against Revenue from Government is mainly due to the demand-driven funding model in place in the Migration and Refugee Division, inherited from the Migration Review Tribunal and Refugee Review Tribunal at amalgamation. The funding model is based on appropriation at budget for finalising 18,000 decisions per annum, adjusted for any variances above (additional appropriation) or below (handing back appropriation) that number, at Portfolio Additional Estimates Statements (PAES). The Migration and Refugee Division finalised 16,111 decisions in 2015-16.

The Changes in asset revaluation surplus relates to lease extensions executed for the Melbourne and Perth accommodation. These extensions were not anticipated at the time of developing the budget.

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as at 30 June 20162016 Original Budget

Notes $’000 $’000ASSETSFinancial assets

Cash and Cash Equivalents 3.1A 489 620 Trade and Other Receivables 3.1B 63,515 70,924

Total financial assets 64,004 71,544 Non-financial assets

Leasehold improvements 3.2A 33,293 13,567 Plant and equipment 3.2A 2,573 5,865 Computer software 3.2A 3,968 4,796 Other Non-Financial Assets 3.2B 545 733

Total non-financial assets 40,379 24,961 Total assets 104,383 96,505 LIABILITIESPayables

Suppliers 3.3A 1,899 9,395 Other Payables 3.3B 24,989 3,873

Total payables 26,888 13,268 Interest bearing liabilities

Leases 3.8AHidden - 25 Total interest bearing liabilities - 25 Provisions

Employee Provisions 6.1A 20,189 21,799 Other Provisions 3.4A 2,330 1,741

Total provisions 22,519 23,540 Total liabilities 49,407 36,833 Net assets 54,976 59,672 EQUITY

Contributed equity 55,056 61,795 Reserves 5,141 3,600 Retained deficit (5,221) (5,723)

Total equity 54,976 59,672

Statement of Financial Position


Budget Variances CommentaryStatement of Financial Position for not-for-profit Reporting EntitiesVariances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Statement of Financial Position, it is total equity.

Original Budget for Trade and Other Receivables included appropriation receivable balances of the Migration Review Tribunal and Refugee Review Tribunal and the Social Security Appeals Tribunal. A section 75 determination was not signed as at 30 June 2016 for the cash and receivable amounts of the Social Security Appeals Tribunal, therefore these amounts have not been recognised in the 2015-16 results.

The variance against Leasehold improvements relates to fit-out acquisition in the Sydney co-location. This information was not available at the time of developing the budget.

The variance against Plant and equipment relates to budgeted acquisition not taking place due to delayed co-location in Melbourne, Perth and Adelaide.

Suppliers payables represent activity performed during the year but unpaid at year-end. These amounts vary from year to year dependent on the timing of work delivered by suppliers and the payment terms of contracts.

The variance against Other payables relates to the lessor's contribution to fit-out for the property lease in Sydney. Lease incentive is amortised on a straight line basis, and this information was not available at the time of developing the budget.

Original Budget for Contributed equity included net assets of the Migration Review Tribunal and Refugee Review Tribunal and the Social Security Appeals Tribunal. A section 75 determination was not signed as at 30 June 2016 for the cash and receivable amounts of the Social Security Appeals Tribunal, therefore these amounts have not been recognised in the 2015-16 results.

The variance against Reserves is due to revaluation reserves relating to asset revaluation surplus outlined in the Statement of Comprehensive Income.

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2016 Original BudgetNotes $’000 $’000

CONTRIBUTED EQUITYOpening balanceBalance carried forward from previous period 6,201 6,201 Adjusted opening balance 6,201 6,201

Transactions with ownersContributions by owners

Departmental capital budget 4,633 4,633 Restructuring 8.1 44,222 50,961

Total transactions with owners 48,855 55,594 Transfers between equity components - -Closing balance as at 30 June 55,056 61,795

RETAINED EARNINGSOpening balance 2,858 (52)Adjusted opening balance 2,858 (52)

Comprehensive incomeSurplus/(Deficit) for the period (8,079) (5,671)Total comprehensive income (8,079) (5,671)Transfers between equity components - -Closing balance as at 30 June (5,221) (5,723)

ASSET REVALUATION RESERVEOpening balance 4,088 3,600 Adjusted opening balance 4,088 3,600

Comprehensive incomeOther comprehensive income 1,053 -Total comprehensive income 1,053 -Transfers between equity components - -Closing balance as at 30 June 5,141 3,600

Variances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Statement of Changes in Equity, it is total equity.

The variance against Restructuring reflects the section 75 determination not signed as at 30 June 2016 for the cash and receivable amounts of the Social Security Appeals Tribunal, outlined in the Statement of Financial Position.

The variance against the Retained Earnings opening balance relates to the operating result of the AAT for 2014-15 not available at the time of developing the original budget.

The variance against Deficit for the period predominantly relates to lower appropriation revenue recognised during the year. The AAT is currently funded using a combination of funding inherited from the amalgamating tribunals, including a demand-driven funding model for the Migration and Refugee Division which provides upfront (fixed) funding for a base number of 18,000 cases, and a marginal cost based funding adjustment for actual caseload finalised (above or below the base number of cases) for the year. The AAT's other divisions and the Immigration Assessment Authority (IAA) are funded on a fixed funding model and is not linked to caseload. In 2015-16, the Migration and Refugee Division finalised 16,111 cases, 1,889 below the base number of cases.

The increase to Asset revaluation reserve from comprehensive income relates to the revaluation surplus recognised for leasehold improvement assets, outlined in the Statement of Comprehensive Income.

Statement of Changes in Equity

for the period ended 30 June 2016

Budget Variances CommentaryStatement of Changes in Equity for not-for-profit Reporting Entities


Accounting Policy Equity Injections Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) and Departmental Capital Budgets (DCBs) are recognised directly in contributed equity in that year. Restructuring of Administrative Arrangements Net assets received from or relinquished to another Government entity under a restructuring of administrative

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OPERATING ACTIVITIESCash received

Appropriations 131,591 120,393 Sale of goods and rendering of services 751 1,177 Other1 18,458 -

Total cash received 150,800 121,570

Cash usedEmployees (97,958) (96,202)Suppliers (30,294) (25,125)Net GST paid (232) -

Total cash used (128,484) (121,327)Net cash from/(used by) operating activities 22,316 243

INVESTING ACTIVITIESCash used

Purchase of property, plant and equipment (27,244) (4,633)Total cash used (27,244) (4,633)Net cash from/(used by) investing activities (27,244) (4,633)

FINANCING ACTIVITIESCash received

Contributed equity 4,633 4,633 Cash received on restructuring of administrative arrangements 220 -

Total cash received 4,853 4,633

Net cash from/(used by) financing activities 4,853 4,633

Net increase/(decrease) in cash held (75) 243 Cash and cash equivalents at the beginning of the reporting period 564 377 Cash and cash equivalents at the end of the reporting period 3.1A 489 620

The above statement should be read in conjunction with the accompanying notes.1. The amount represents movement in lease incentives balances related to the Sydney fit-out landlord incentive.

Variances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Cash Flow Statement, it is total equity.

The variance against Other under Operating Activities Cash received relates to lessor's contribution to fit-out for the property lease in Sydney, outlined in the Statement of Financial Position.

The variance against Suppliers under Operating Activities Cash used relates to higher than budgeted suppliers' expenses, discussed in the Statement of Comprehensive Income.

The variance against Purchase of property, plant and equipment under Investing Activities Cash used relates predominantly to higher than budgeted leasehold improvement purchase, discussed in the Statement of Financial Position.

Cash Flow Statement

for the period ended 30 June 2016

Budget Variances CommentaryCash Flow Statements for not-for-profit Reporting Entities

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NET COST OF SERVICES

Bad debts (Refugee Review Tribunal post decision fees)2.1A 2,307 2,600

Other Expenses 2.1A 5,256 6,400 Total expenses 7,563 9,000

Income

RevenueNon-taxation revenue

Other Revenue 2.2A 26,633 28,392 Total non-taxation revenue 26,633 28,392 Total revenue 26,633 28,392

Total income 26,633 28,392 Net contribution by services 19,070 19,392 Surplus 19,070 19,392

OTHER COMPREHENSIVE INCOMETotal comprehensive income 19,070 19,392

The above schedule should be read in conjunction with the accompanying notes.

Administered Schedule of Comprehensive Incomefor the period ended 30 June 2016

Expenses

Budget Variances CommentaryAdministered Schedule of Comprehensive Income for not-for-profit Reporting EntitiesVariances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Administered Schedule of Comprehensive Income, they are total administered expenses or total administered revenue.

The variance against Bad debts relates to fewer decisions made by the Refugee Review Tribunal and a decrease in provision for Refugee Review Tribunal post-decision fees receivable. The management of Refugee Review Tribunal post-decision fees receivable is carried out by the Department of Immigration and Border Protection and provision of doubtful debt is made based on the actual repayment trend. There is a marginal increase in repayments received and this is reflected in the reduced provision.

The variance against Other expenses relates to the lower volume of refunds paid and is reflective of the total number of cases finalised by the AAT in 2015-16.

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ASSETSFinancial assets

Cash and Cash Equivalents 4.1A 162 138 Trade and Other Receivables 4.1B 2,801 2,210

Total financial assets 2,963 2,348

Total assets administered on behalf of Government2,963 2,348

LIABILITIESPayables

Suppliers 4.2A 437 -Total payables 437 -

Total liabilities administered on behalf of Government437 -

Net assets 2,526 2,348

Variances are considered to be “major” based on the following criteria:• variance between budget and actual is greater than 10% at item level; and• variance is greater than 2% of the relevant categories. In the case of the Administered Schedule of Assets and Liabilities, it is administered net assets.

Trade and other receivables relates to Refugee Review Tribunal post-decision fees receivable and is driven by the number of applications received and finalised by the AAT. The number of applications received fluctuates from year to year and is beyond the AAT's control.

Administered Schedule of Assets and Liabilitiesas at 30 June 2016


Budget Variances CommentaryAdministered Schedule of Assets and Liabilities for not-for-profit Reporting Entities

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2016 Notes $’000

Opening assets less liabilities as at 1 July 3 Adjusted opening assets less liabilities 3

Net (cost of)/contribution by servicesIncome 26,633 Expenses

Payments to entities other than corporate Commonwealth entities (7,563)

Transfers (to)/from the Australian Government

Special appropriations (limited) 5,333

Appropriation transfers to Official Public AccountTransfers to Official Public Account (23,389)Restructuring 1,509

Closing assets less liabilities as at 30 June 2,526


Administered Reconciliation Schedule

Payments to entities other than corporate Commonwealth entities

Accounting Policy Administered cash transfers to and from the Official Public Account Revenue collected by the AAT for use by the Government rather than the AAT is administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the Department of Finance. Conversely, cash is drawn from the OPA to make payments under Parliamentary appropriation on behalf of Government. These transfers to and from the OPA are adjustments to the administered cash held by the AAT on behalf of Government and reported as such in the schedule of Administered Cash Flows and in the Administered Reconciliation Schedule.

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2016 Notes $’000

OPERATING ACTIVITIESCash received

Application fees 23,435 Total cash received 23,435

Cash usedRefund of application fees (5,343)

Total cash used (5,343)Net cash from/(used by) operating activities 18,092

INVESTING ACTIVITIESTotal cash used -Net cash from/(used by) investing activities -

FINANCING ACTIVITIESCash received

Cash received on restructuring of administrative arrangements 123 Total cash received 123

Net cash from/(used by) financing activities 123

Cash from Official Public AccountAppropriations 5,333

Total cash from Official Public Account 5,333

Cash to Official Public AccountAppropriations (23,389)

Total cash to Official Public Account (23,389)

Cash and cash equivalents at the beginning of the reporting period 3 Effect of exchange rate movements on cash and cash equivalents at the beginning of the reporting period -Cash and cash equivalents at the end of the reporting period 4.1A 162

This schedule should be read in conjunction with the accompanying notes.

Administered Cash Flow Statementfor the period ended 30 June 2016

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Notes to and forming part of the financial statements

The financial statements have been prepared in accordance with:

a) Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR) for reporting periods ending on or after 1 July 2015; and

b) Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars, and have been rounded to the nearest $'000 unless disclosure of the full amount is required.

Employee entitlement provision – Refer Note 6.1A: Employee Provisions.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

Make good provision – Refer Note 3.4A: Other Provisions.Impairment of trade receivables – Refer Note 4.1B: Trade and Other Receivables.

The continued existence of the AAT in its present form and with its present programmes is dependent on Government policy and on continuing funding by Parliament for the AAT's administration and programmes.

The AAT's activities contributing toward these outcomes are classified as either departmental or administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled or incurred by the AAT in its own right. Administered activities involve the management or oversight by the AAT, on behalf of the Government, of items controlled or incurred by the Government.

The AAT's administered activities on behalf of the Government are generally limited to collection and refund of application fees as prescribed by the Administrative Appeals Tribunal Act 1975 , the Administrative Appeals Tribunal Regulation 2015 , the Migration Act 1958 and the Migration Regulations 1994 . Additional administered revenues may be remitted by the AAT to Government where there is no right for the AAT to retain the revenue as departmental revenue.

Accounting Judgements and Estimates

Fair value of buildings, plant and equipment – Refer Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles.

The Basis of Preparation

The financial statements are general purpose financial statements and are required by section 42 of the PGPA Act.

Remaining useful lives of buildings, infrastructure, plant and equipment - Refer Note 3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles.

On 1 July 2015, the Migration Review Tribunal and Refugee Review Tribunal (MRT-RRT) and the Social Security Appeals Tribunal (SSAT) merged with the AAT pursuant to the Tribunals Amalgamation Act 2015 . All assets, liabilities and commitments of the MRT-RRT and the SSAT were transferred to the AAT, except for $8.9m in cash and receivable of the SSAT, which will be recognised on completion of the section 75 determination. The AAT continues to operate as a non-corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Refer to note 8.1 Restructuring for details of assets and liabilities transferred. Therefore, in preparing these financial statements, the AAT has reported the results of the assets and liabilities controlled and the income and expenses attributable to the outcome during the financial year. The comparative financial information has not been deemed useful to the users of the financial statements and accordingly has not been presented.

Objectives of the Entity

The Administrative Appeals Tribunal (AAT) is an Australian Government controlled entity. It is a not-for-profit entity. The objective and sole outcome of the AAT is to provide independent review on the merits of a wide range of administrative decisions made under Commonwealth laws so as to ensure in each case the correct or preferable decision is made. The financial statement reflects the result of this one outcome.

Overview

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Standard/ Interpretation

Standard/ Interpretation Application date for the AAT1 Nature of impending change/s in accounting policy and likely impact on initial application

AASB 15 Revenue from contracts with customers 1 July 2018

AASB 15 represents the replacement standard for AASB 118 ‘Revenue’, AASB 111 ‘Construction Contracts’ and Interpretation 12 ‘Service Concession Arrangements’.The core principle of the standard requires an entity to recognise revenue such that it depicts the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require:- contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract;- determination of the transaction price, adjusted for the time value of money excluding credit risk;- allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or an estimation approach if no distinct observable prices exist; and- recognition of revenue when each performance obligation is satisfied.

AASB 9 Financial Instruments 1 July 2018

AASB 9 changes the accounting for impairment of financial assets, classification and measurement of all financial assets and liabilities, and hedge accounting.

Impairment of financial assets - The new impairment model uses a forward looking (expected loss model) such that an entity is required to recognise expected credit losses rather than losses incurred.

Classification and measurement - All financial assets are required to be measured at fair value unless they are intended to be held, and cash flows solely represent principal and interest. When financial assets are measured at fair value, changes in fair value are recognised through either profit or loss or other comprehensive income depending on the specific classification.

Hedge accounting - The new standard simplifies the hedge accounting rules including the elimination of the 80%-12% quantitative threshold for qualifying for hedge accounting.

When transitional provisions apply, all changes in accounting policy are made in accordance with their respective transitional provisions.All other new amending standards that were issued prior to the sign-off date and are applicable to the current reporting period did not have a material effect, and are not expected to have a future material effect, on the AAT's financial statements.

Future Australian Accounting Standard RequirementsThe following new standards, revised standards, interpretations and amending standards were issued by the AASB prior to the signing of the statement by the Accountable Authority and Chief Financial Officer, which are expected to have a material impact on the AAT's financial statements for future reporting period(s):

AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality

New Accounting Standards

Adoption of New Australian Accounting Standard RequirementsNo accounting standard has been adopted earlier than the application date as stated in the standard.

The following amending standards were issued prior to the signing of the statement by the Accountable Authority and Chief Financial Officer, were applicable to the current reporting period, and had a material effect on the AAT's financial statements:

Nature of change in accounting policy, transitional provisions, and adjustment to financial statementsCompletes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations, allowing that Standard to effectively be withdrawn.

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Standard/ Interpretation Application date for the AAT1 Nature of impending change/s in accounting policy and likely impact on initial application

AASB 16 Leases 1 July 2019

The revised standard replaces AASB 117 Leases and provides a single lessee accounting model, requiring lessee to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with AASB 16's approach to lessor accounting substantially unchanged from its predecessor, AASB 117.

Departmental

Administered

No subsequent events have been identified that have potential to significantly affect the ongoing structure or financial activities of the AAT.

No subsequent events have been identified that have potential to significantly affect the ongoing structure or financial activities of the AAT.

Reporting of Administered activitiesAdministered revenues, expenses, assets, liabilities and cash flows are disclosed in the administered schedules and related notes.

Except where otherwise stated, administered items are accounted for on the same basis and using the same policies as for departmental items, including the application of Australian Accounting Standards.

Events After the Reporting Period

The AAT is exempt from all forms of taxation except Fringe Benefits Tax and the Goods and Services Tax (GST).

1. The AAT's expected initial application date is when the accounting standard becomes operative at the beginning of the AAT's reporting period.

All other new standards, revised standards, interpretations and amending standards that were issued prior to the sign-off date and are applicable to future reporting period(s) are not expected to have a future material impact on the AAT's financial statements.

Taxation

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1.1 Expenses2016$’000

1.1A: Employee BenefitsWages and salaries 72,136 Superannuation

Defined contribution plans 5,703 Defined benefit plans 7,037

Leave and other entitlements 8,992 Separation and redundancies 448 Total employee benefits 94,316

1.1B: SuppliersGoods and services supplied or rendered

Consultants 694 Travel 704 IT services 3,393 Other 12,358

Total goods and services supplied or rendered 17,149

Goods supplied 668 Services rendered 16,481 Total goods and services supplied or rendered 17,149

Other suppliersOperating lease rentals in connection with

Minimum lease payments 14,638 Workers compensation expenses 373

Total other suppliers 15,011 Total suppliers 32,160

Leasing commitments

Within 1 year 12,304 Between 1 to 5 years 45,659 More than 5 years 44,343

Total operating lease commitments 102,306

The AAT in its capacity as lessee holds commercial office accommodation leases in Canberra, Sydney, Melbourne, Brisbane, Adelaide and Perth where lease payments are subject to fixed or market review increases as listed in the lease agreements. An arrangement equivalent to commercial office accommodation leases is presently being negotiated in relation to Commonwealth-owned law courts accommodation in Hobart and no commitment is recognised at this time.

Commitments for minimum lease payments in relation to non-cancellableoperating leases are payable as follows:

Accounting Policy Accounting policies for employee-related expenses are contained in Note 6.1 of the People and Relationships section.

Financial Performance This section analyses the financial performance of the AAT for period ended 30 June 2016.

Accounting Policy Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.

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1.2 Own-Source Revenue and Gains2016$’000

Own-Source Revenue1.2A: Sale of Goods and Rendering of ServicesRendering of services 743 Total sale of goods and rendering of services 743

1.2B: Other Revenue2016$’000

Resources received free of chargeRemuneration of auditors 102

Total other revenue 102

Gains

1.2C: Other GainsResources received free of charge 1,097Liabilities assumed by other departments 345Total other gains 1,442

1.2D: Revenue from GovernmentAppropriations

Departmental appropriations 123,529 Total revenue from Government 123,529

Accounting Policy Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The stage of completion of contracts at the reporting date is determined by reference to services performed to date as a percentage of total services to be performed. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any impairment allowance account. Collectability of debts is reviewed at end of the reporting period. Allowances are made when collectability of the debt is no longer probable.

Accounting Policy Resources Received Free of Charge Resources received free of charge are recognised as revenue when, and only when, a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Resources received free of charge are recorded as either revenue or gains depending on their nature unless received from another Government entity as a consequence of a restructuring of administrative arrangements (refer to Note 8.1A). Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government entity as a consequence of a restructuring of administrative arrangements (refer to Note 8.1A).

Accounting Policy Sale of Assets Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

Accounting Policy Revenue from Government Amounts appropriated for departmental appropriations for the year (adjusted for any formal additions and reductions) are recognised as Revenue from Government when the entity gains control of the appropriation, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts.

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2.1 Administered - Expenses

2016$'000

2.1A: Other ExpensesRefund of application fees 5,256 Bad debts expense 2,307 Total other expenses 7,563

2.2 Administered - Income

2016$'000

Revenue2.2A: Other RevenueApplication fees 26,633 Total other revenue 26,633

Income and Expenses Administered on Behalf of Government This section analyses the activities that the AAT does not control but administers on behalf of Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

Accounting Policy Application Fees Revenue is generated from fees charged for applications when lodged and applications once the decision has been made (post-decision fee). Administered fee revenue is recognised when invoiced or received.

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3.1 Financial Assets

2016$’000

3.1A: Cash and Cash EquivalentsCash on hand or on deposit 489 Total cash and cash equivalents 489

3.1B: Trade and Other ReceivablesGoods and services receivables

Goods and services 1,277 Total goods and services receivables 1,277

Appropriations receivablesAppropriation receivable 61,956

Total appropriations receivables 61,956

Other receivablesStatutory receivables 282

Total other receivables 282 Total trade and other receivables (gross) 63,515

Total trade and other receivables (net) 63,515

Trade and other receivables (net) expected to be recoveredNo more than 12 months 63,515 More than 12 months -


Trade and other receivables (gross) aged as followsNot overdue 63,469 Overdue by

0 to 30 days 5 31 to 60 days 8 61 to 90 days 33 More than 90 days -


Credit terms for goods and services were within 30 days.

Accounting Policy Cash is recognised at its nominal amount. Cash and cash equivalents includes: a) cash on hand; b) demand deposits in bank accounts with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value; and c) cash in special accounts.

Accounting Policy Loans and Receivables Trade receivables, loans and other receivables that have fixed or determinable payments and that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method less impairment.

Financial Position This section analyses the AAT's assets used to conduct its operations and the operating liabilities incurred as a result. Employee-related information is disclosed in the People and Relationships section.

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3.2 Non-Financial Assets

3.2A: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Reconciliation of the opening and closing balances of property, plant and equipment for 2016

Leasehold improvements

Plant and equipment

Computer Software Total

$’000 $’000 $’000 $’000As at 1 July 2015Gross book value 2,497 1,294 1,039 4,830 Accumulated depreciation, amortisation and impairment - - (1,012) (1,012)Total as at 1 July 2015 2,497 1,294 27 3,818 Additions

Purchase 24,322 1,338 1,584 27,244 Acquisition of entities or operations (including restructuring) 8,590 1,679 4,869 15,138

Revaluations and impairments recognised in other comprehensive income 1,258 (205) - 1,053 Depreciation and amortisation (3,374) (1,518) (2,512) (7,404)Disposals - (15) - (15)Total as at 30 June 2016 33,293 2,573 3,968 39,834

Total as at 30 June 2016 represented byGross book value 33,293 2,573 7,492 43,358 Accumulated depreciation, amortisation and impairment - - (3,524) (3,524)Total as at 30 June 2016 33,293 2,573 3,968 39,834

Revaluations of non-financial assets

Contractual commitments for the acquisition of property, plant, equipment and intangible assetsAs at the reporting date, the AAT did not enter into significant contractual commitments for the acquisition of property, plant, equipment and intangible assets.

On 30 June 2016, an independent valuer conducted the revaluations. Refer to Note 7.4.

Page 19 of 43



Accounting Policy Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate. Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring. Asset Recognition Threshold Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $2,000 which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions taken up by the entity where there exists an obligation to restore the property to its original condition. These costs are included in the value of the entity's leasehold improvements with a corresponding provision for the ‘make good’ recognised. Revaluations Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depend upon the volatility of movements in market values for the relevant assets. Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reversed a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. Depreciation Depreciable property, plant and equipment and leasehold assets are written -off to their estimated residual values over their estimated useful lives to the entity using, in all cases, the straight-line method of depreciation. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives: Impairment All assets were assessed for impairment at 30 June 2016. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the entity were deprived of the asset, its value in use is taken to be its depreciated replacement cost. Derecognition An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Intangibles The AAT's intangibles comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the entity's software are 3 to 5 years. All software assets were assessed for indications of impairment as at 30 June 2016. Accounting Judgements and Estimates In the process of applying the accounting policies listed in this note, the AAT has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

-the fair value of property, plant and equipment has been taken to be the fair value of similar assets as determined by an independent valuer.

Leasehold improvements Plant and

2016 Lesser of estimated useful life and lease term 3-20 years

Page 20 of 43



2016$’000

3.2B: Other Non-Financial AssetsPrepayments 545

Total other non-financial assets 545

Other non-financial assets expected to be recoveredNo more than 12 months 545 More than 12 months -

Total other non-financial assets 545

2016$’000

3.3A: SuppliersTrade creditors and accruals 1,899 Total suppliers 1,899

Suppliers expected to be settledNo more than 12 months 1,899 More than 12 months -

Total suppliers 1,899

3.3B: Other PayablesSalaries and wages 523 Lease incentive 24,466 Total other payables 24,989

Other payables to be settledNo more than 12 months 1,947 More than 12 months 23,042

Total other payables 24,989

3.4 Other Provisions2016$’000

3.4A: Other ProvisionsProvision for

restoration$’000

As at 1 July 2015 230 Additional provisions made 469 Balance transferred due to amalgamation 1,843 Amounts used (246)Amounts reversed (85)Unwinding of discount or change in discount rate 119

Total as at 30 June 2016 2,330

Other provisions expected to be settledNo more than 12 months 1,121 More than 12 months 1,209

Total other provisions 2,330

3.2 Non-Financial Assets continued

No indicators of impairment were found for other non-financial assets.

3.3 Payables

Settlement was usually made within 30 days.

Accounting Judgements and Estimates The AAT received incentives in the form of rent free periods and contributions on entering operating leases. Lease incentives are amortised on a straight line basis which is representative of the pattern of benefits derived from the incentives.

Accounting Judgements and Estimates The AAT currently has seven agreements for the leasing of premises which have provisions requiring the AAT to restore the premises to their original condition at the conclusion of the leases. The AAT has made a provision to reflect the present value of the anticipated future costs. The calculation of this provision requires assumptions in determining the costs required to restore the premises to their original condition, which, because of the long-term nature of the liability, is the most significant uncertainty. This uncertainty may result in future actual expenditure differing from amounts currently provided. The provision recognised is reviewed annually and updated based on the facts and circumstances available at the time.

Page 21 of 43



4.1 Administered - Financial Assets2016$’000

4.1A: Cash and Cash EquivalentsCash on hand or on deposit 162 Total cash and cash equivalents 162

4.1B: Trade and Other ReceivablesOther receivables

Fees 10,650 Total other receivables 10,650 Total trade and other receivables (gross) 10,650

Less impairment allowance (7,849)


Trade and other receivables (net) expected to be recoveredNo more than 12 months 2,801 More than 12 months -


Trade and other receivables (gross) aged as followsNot overdue 645 Overdue by

0 to 30 days 396 31 to 60 days 214 61 to 90 days 396 More than 90 days 8,999


Impairment allowance aged as followsNot overdue 345 Overdue by

0 to 30 days 297 31 to 60 days 160 61 to 90 days 297 More than 90 days 6,750

Total impairment allowance 7,849

Credit terms for goods and services were within 30 days.

Assets and Liabilities Administered on Behalf of Government This section analyses assets used to conduct operations and the operating liabilities incurred which as a result the AAT does not control but administers on behalf of Government. Unless otherwise noted, the accounting policies adopted are consistent with those applied for departmental reporting.

Page 22 of 43



Reconciliation of the Impairment Allowance

Movements in relation to 2016Other

receivables$'000

As at 1 July 2015 -Balance transferred due to amalgamation 8,486 Amounts written off -Amounts recovered and reversed -Increase/(Decrease) recognised in net cost of services (637)

Total as at 30 June 2016 7,849

Accounting Policy Loans and Receivables Where loans and receivables are not subject to concessional treatment, they are carried at amortised cost using the effective interest method. Gains and losses due to impairment, derecognition and amortisation are recognised through profit or loss. Accounting Judgements and Estimates Collectability of debt is reviewed at the end of the reporting period. Impairment allowances are made when the collectibility of the debt is judged to be less, rather than more, likely.

Page 23 of 43



4.2 Administered - Payables

2016$’000

4.2A: SuppliersTrade creditors and accruals 437 Total suppliers 437

Suppliers expected to be settledNo more than 12 months 437 More than 12 months -

Total suppliers 437

Settlement was usually made within 30 days.

Page 24 of 43


Not

es to

and

form

ing p

art o

f the

fina

ncial

stat

emen

ts

5.1B

: Uns

pent

Ann

ual A

ppro

pria

tion

s ('R

ecov

erab

le G

ST e

xclu

sive

')20

16$’

000

Dep

artm

enta

lAp

prop

riatio

n Ac

t (No

. 1) 2

014-

15 -

Appr

opria

tion

Act (

No. 3

) 201

4-15

23,6

14

Appr

opria

tion

Act (

No. 1

) 201

5-16

33,0

05

Appr

opria

tion

Act (

No. 3

) 201

5-16

9,70

6 To

tal d

epar

tmen

tal

66,3

25

5.1C

: Spe

cial

App

ropr

iati

ons

('Rec

over

able

GST

exc

lusi

ve')

Appr

opri

atio

n ap

plie

d20

16$'

000

Publ

ic Go

vern

ance

, Per

form

ance

and

Acco

unta

bilit

y Act

2013

s.7

7(e)

, Adm

inist

ered

5,33

3

Tota

l spe

cial

app

ropr

iati

ons

appl

ied

5,33

3

Auth

orit

y

Page

26 of

43



5.2 Net Cash Appropriation Arrangements

2016$’000

Total comprehensive income/(loss) less depreciation/amortisation expenses previously funded through revenue appropriations 8,457 Plus: depreciation/amortisation expenses previously funded through revenue appropriation (7,404)Total comprehensive income/(loss) - as per the Statement of Comprehensive Income 1,053

Page 27 of 43



5.3 Cash Flow Reconciliation

5.3A: Cash Flow Reconciliation2016$’000

Cash and cash equivalents as perCash Flow Statement 489 Statement of Financial Position 489

Discrepancy -

Net cost of services (131,608)Revenue from Government 123,529

Adjustments for non-cash itemsDepreciation/amortisation 7,404 Loss on disposal of assets 15

Movement in assets and liabilitiesAssets

(Increase)/Decrease in net receivables 7,050 (Increase)/Decrease in prepayments (142)

LiabilitiesIncrease/(Decrease) in employee provisions 1,204 Increase/(Decrease) in suppliers payables 356 Increase/(Decrease) in other payables 14,251 Increase/(Decrease) in other provisions 257

Net cash from/(used by) operating activities 22,316

Reconciliation of cash and cash equivalents as per statement of financial position and cash flow statement

Reconciliation of net cost of services to net cash from/(used by) operating activities

Page 28 of 43



5.3B: Administered - Cash Flow Reconciliation2016$’000

Cash and cash equivalents as perAdministered Cash Flow Statement 162 Administered Schedule of Assets and Liabilities 162

Discrepancy -

Net contribution by services 19,070

Adjustments for non-cash itemsNet write down of non-financial assets 2,307

Movement in assets and liabilitiesAssets

(Increase)/Decrease in net receivables (3,199)Liabilities

Increase/(Decrease) in other payables (86)Net cash from operating activities 18,092

Reconciliation of net cost of services to net cash from/(used by) operating activities

Reconciliation of cash and cash equivalents as per statement of financial position and cash flow statement

Page 29 of 43



6.1 Employee Provisions

2016$’000

6.1A: Employee ProvisionsLeave 20,189 Total employee provisions 20,189

Employee provisions expected to be settledNo more than 12 months 11,507 More than 12 months 8,682

Total employee provisions 20,189

People and Relationships This section describes a range of employment and post-employment benefits provided to AAT's people and its relationships with other key people.

Accounting policy Liabilities for 'short-term' employee benefits and termination benefits expected within 12 months of the end of reporting period are measured at their nominal amounts. Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly. Leave The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the entity is estimated to be less than the annual leave entitlement for sick leave. The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The liability for long service leave is recognised and measured using the short-hand method included in the FRR at the present value of the estimated future cash flows to be made in respect of all employees at 30 June 2016. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Superannuation Most members and staff of the AAT are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government. The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes. The AAT makes employer contributions to the employees' defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The AAT accounts for the contributions as if they were contributions to defined contribution plans. The liability for superannuation recognised as at 30 June represents outstanding contributions. Accounting Judgements and Estimates The employee benefits provisions have been estimated in accordance with AASB 119 Employee Benefits and reflect the expected value of those benefits.

Page 30 of 43



6.2 Senior Management Personnel Remuneration

2016$’000

Short-term employee benefitsSalary 1,356

Total short-term employee benefits 1,356

Post-employment benefitsSuperannuation 211

Total post-employment benefits 211

Other long-term employee benefitsAnnual leave 112 Long-service leave 36

Total other long-term employee benefits 148

Termination benefitsVoluntary redundancy payments 90

Total termination benefits 90

Total senior executive remuneration expenses 1,805

The total number of senior management personnel that are included in the above table are eight.

Page 31 of 43



7.1 Contingent Assets and Liabilities

7.1B: Administered - Contingent Assets and Liabilities

Quantifiable Contingencies

Quantifiable Administered Contingencies

There are no quantifiable contingent liabilities or assets at 30 June 2016.

Unquantifiable Administered ContingenciesThere are no unquantifiable or remote contingencies at 30 June 2016.

There are no quantifiable contingent liabilities or assets at 30 June 2016.Unquantifiable Contingencies

There are no unquantifiable or remote contingencies at 30 June 2016.

Managing Uncertainties This section analyses how the AAT manages financial risks within its operating environment.

Page 32 of 43



7.2 Financial Instruments

2016$’000

7.2A: Categories of Financial InstrumentsFinancial Assets

Cash and cash equivalents 489 Loans and receivables

Goods and services receivables 1,277

Total financial assets 1,766

Financial LiabilitiesFinancial liabilities measured at amortised cost

Trade creditors and accruals 1,899 1,899

Total financial liabilities 1,899

7.2B: Net gains or losses on financial assetsThe AAT has no gains or losses in relation to financial assets for year ending 30 June 2016.

7.2C: Net gains or losses on financial liabilitiesThe AAT has no gains or losses in relation to financial liabilities for year ending 30 June 2016.

Total financial liabilities measured at amortised cost

Page 33 of 43



Accounting Policy Financial assets The AAT classifies its financial assets in the following category: a) loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets are recognised and derecognised upon trade date. Loans and Receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate. Effective Interest Method Income is recognised on an effective interest rate basis except for financial assets that are recognised at fair value through profit or loss. Impairment of Financial Assets Financial assets are assessed for impairment at the end of each reporting period. Financial assets held at amortised cost - if there is objective evidence that an impairment loss has been incurred for loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Statement of Comprehensive Income. Financial assets held at cost - if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets. Financial liabilities Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’. Financial Liabilities at Fair Value Through Profit or Loss Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other Financial Liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis. Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Page 34 of 43


Not

es to

and

form

ing p

art o

f the

fina

ncial

stat

emen

ts

7.2

Fina

ncia

l Ins

trum

ents

7.2E

: Liq

uidi

ty R

isk

On

dem

and

Wit

hin

1 ye

arBe

twee

n 1

to 2

ye

ars

Betw

een

2 to

5

year

sM

ore

than

5 y

ears

Tota

l

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

Trad

e cre

dito

rs -

1,89

9 -

- -

1,89

9

Tota

l -

1,89

9 -

- -

1,89

9

7.2F

: Mar

ket R

isk

Liqu

idity

risk

is th

e risk

that

the A

AT w

ill no

t be a

ble t

o mee

t its

oblig

atio

ns as

they

fall d

ue.

The A

AT is

appr

opria

tely

fund

ed fr

om th

e Aus

tralia

n Gov

ernm

ent a

nd m

anag

es it

s bud

gete

d fun

ds to

ensu

re it

is ab

le to

mee

t pay

men

ts as

they

fall d

ue. P

olici

es ar

e in p

lace t

o ens

ure t

imely

paym

ents

are

mad

e whe

n due

and

ther

e hav

e bee

n no p

ast e

xper

ience

of de

faul

t.

Mat

urit

ies

for

non-

deri

vati

ve fi

nanc

ial l

iabi

litie

s in

201

6

The A

AT he

ld ba

sic fi

nanc

ial in

strum

ents

that

did n

ot ex

pose

it to

certa

in m

arke

t risk

s, su

ch as

‘Cur

renc

y risk

’, ‘In

tere

st ra

te ri

sk’ o

r ‘Ot

her p

rice r

isk’.

Page

36

of 4

3


Not

es to

and

form

ing p

art o

f the

fina

ncial

stat

emen

ts

2016

$’00

0

7.3A

: Cat

egor

ies

of F

inan

cial

Inst

rum

ents

Fina

ncia

l Ass

ets

Cash

on ha

nd or

on de

posit

162

Loan

s an

d re

ceiv

able

sGo

ods a

nd se

rvice

s rec

eivab

le2,

801

7.3B

: Cre

dit R

isk

Not

pas

t due

nor

im

pair

edPa

st d

ue o

r im

pair

ed20

1620

16$’

000

$’00

0Ca

sh on

hand

or on

depo

sit16

2 -

Tota

l16

2 -

7.3

Adm

inis

tere

d - F

inan

cial

Inst

rum

ents

The m

axim

um ex

posu

re to

cred

it ris

k is t

he ri

sk th

at ar

ises f

rom

pote

ntial

defa

ult o

f pos

t-dec

ision

appl

icatio

n fee

s by a

n RRT

appl

icant

. Thi

s am

ount

is eq

ual t

o the

tota

l am

ount

of tr

ade r

eceiv

ables

$1

0,650

,133.

The A

AT ha

s a M

emor

andu

m of

Und

ersta

ndin

g with

the D

epar

tmen

t of I

mm

igrat

ion a

nd B

orde

r Pro

tect

ion t

o inv

oice

and

man

age t

he re

cove

ry of

thes

e deb

ts. T

he D

epar

tmen

t ass

esse

s the

risk

of

defa

ult o

n pay

men

t and

reco

mm

ends

prov

ision

and

writ

e off

to th

e AAT

. The

AAT

has a

lloca

ted $

7,849

,178 i

n 20

16 to

an im

pairm

ent a

llowa

nce a

ccou

nt.

The D

epar

tmen

t as t

he ag

ent f

or th

e AAT

man

ages

the c

redi

t risk

by ac

ting p

rom

ptly

to re

cove

r pas

t due

amou

nts a

nd ne

gotia

ting p

aym

ent p

lans w

ith de

btor

s. Th

e AAT

has n

o sig

nific

ant e

xpos

ures

to an

y co

ncen

tratio

ns of

cred

it ris

k with

parti

cular

appl

icant

s and

seek

ing c

ollat

eral

to m

itiga

te ag

ainst

poss

ible

cred

it ris

ks is

not a

pplic

able.

Cred

it q

ualit

y of

fina

ncia

l ass

ets

not p

ast d

ue o

r in

divi

dual

ly d

eter

min

ed a

s im

pair

ed

Page

37

of 4

3


Not

es to

and

form

ing p

art o

f the

fina

ncial

stat

emen

ts

7.3C

: Liq

uidi

ty R

isk

On

dem

and

Wit

hin

1 ye

arBe

twee

n 1

to 2

ye

ars

Betw

een

2 to

5

year

sM

ore

than

5 y

ears

Tota

l$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0Cr

edito

rs -

refu

nds

-43

7 -

- -

437

Tota

l -

437

- -

-43

7

7.3D

: Mar

ket R

isk

The A

AT he

ld ba

sic fi

nanc

ial in

strum

ents

that

did n

ot ex

pose

it to

certa

in m

arke

t risk

s, su

ch as

‘Cur

renc

y risk

’, ‘In

tere

st ra

te ri

sk’ o

r ‘Ot

her p

rice r

isk’.

Mat

urit

ies

for

non-

deri

vati

ve fi

nanc

ial l

iabi

litie

s in

201

6

The A

AT's

finan

cial li

abili

ties w

ere t

rade

cred

itors

-refu

nds.

The e

xpos

ure t

o liq

uidi

ty ri

sk w

as ba

sed o

n the

notio

n tha

t the

AAT

wou

ld en

coun

ter d

ifficu

lty in

mee

ting i

ts ob

ligat

ions

asso

ciate

d w

ith fi

nanc

ial

liabi

lities

. Thi

s was

high

ly un

likely

as th

e AAT

was

appr

opria

ted f

undi

ng fr

om th

e Aus

tralia

n Gov

ernm

ent a

nd th

e AAT

man

aged

its b

udge

ted f

unds

to en

sure

it h

ad ad

equa

te fu

nds t

o mee

t pay

men

ts as

they

fe

ll due

. In ad

ditio

n, th

e AAT

had

pol

icies

in pl

ace t

o ens

ure t

imely

paym

ents

wer

e mad

e whe

n due

and

had n

o pas

t exp

erien

ce of

defa

ult.

Page

38

of 4

3


Note

s to a

nd fo

rmin

g par

t of t

he fi

nanc

ial st

atem

ents

Fair

val

ue

mea

sure

men

ts

at th

e en

d of

the

repo

rtin

g pe

riod

2016

$'00

0Ca

tego

ry

(Lev

el 1

, 2 o

r 3)Va

luat

ion

Tech

niqu

e(s)

2In

puts

use

dNo

n-fin

anci

al a

sset

s 1

Leas

ehol

d im

prov

emen

ts33

,293

Le

vel 3

Cost

Appr

oach

Plan

t and

Equ

ipm

ent -

Oth

er2,

128

Leve

l 2M

arke

t App

roac

hPl

ant a

nd E

quip

men

t - Li

brar

y Col

lectio

n30

0 Le

vel 3

Mar

ket A

ppro

ach

Plan

t and

Equ

ipm

ent -

Com

pute

r Equ

ipm

ent

146

Leve

l 3Co

st Ap

proa

ch

Leve

l 2: I

nput

s oth

er th

an qu

oted

price

s inc

lude

d with

in Le

vel 1

that

are o

bser

vabl

e for

the a

sset

or lia

bilit

y, eit

her d

irect

ly or

indi

rect

ly.Le

vel 3

: Uno

bser

vabl

e inp

uts f

or th

e ass

et or

liabi

lity.

7.4A

: Fai

r Va

lue

Mea

sure

men

t

Repl

acem

ent C

ost N

ew (p

rice p

er sq

uare

met

re)

Cons

umed

econ

omic

bene

fit/O

bsol

esce

nce o

f ass

etAd

juste

d mar

ket t

rans

actio

nsAd

juste

d mar

ket t

rans

actio

nsRe

plac

emen

t Cos

t New

Cons

umed

econ

omic

bene

fit/O

bsol

esce

nce o

f ass

et

2. Al

l rev

aluat

ions

wer

e con

duct

ed in

acco

rdan

ce w

ith th

e rev

aluat

ion p

olicy

by A

VS. I

n acc

orda

nce w

ith A

ASB

13, A

VS fo

llowe

d two

appr

oach

es in

dete

rmin

ing t

he fa

ir va

lues

of th

e ass

ets:

Mar

ket a

ppro

ach a

nd D

epre

ciate

d Rep

lacem

ent C

ost a

ppro

ach.

The s

elect

ion

of th

e mos

t app

ropr

iate t

echn

ique

to m

easu

re fa

ir va

lue i

s dep

ende

nt on

the n

atur

e of t

he as

set b

eing m

easu

red a

nd th

e exit

mar

ket w

ithin

whi

ch th

e ass

et w

ould

tran

sact

. No i

ndivi

dual

asse

ts we

re m

easu

red u

sing m

ultip

le va

luat

ion t

echn

ique

s.

Mar

ket a

ppro

ach –

Thi

s app

roac

h pro

vides

an in

dica

tion o

f valu

e by c

ompa

ring t

he su

bjec

t ass

et w

ith si

mila

r ass

ets f

or w

hich

price

info

rmat

ion i

s ava

ilabl

e. M

arke

t evid

ence

has p

rimar

ily be

en so

urce

d fro

m na

tiona

l phy

sical

and o

nlin

e auc

tion m

arke

ts an

d dea

ler

enqu

iries

. The

se in

puts

to th

e fair

valu

e mea

sure

men

ts ar

e con

sider

ed le

vel 2

(apa

rt fro

m th

e lib

rary

colle

ctio

n, wh

ich is

leve

l 3) i

n the

fair

valu

e hier

arch

y as t

hey h

ave b

een o

bser

ved f

rom

the m

arke

t and

AVS

has b

een r

equi

red t

o util

ise m

inim

al pr

ofes

siona

l ju

dgem

ent t

o adj

ustm

ents

for d

iffer

ence

s in a

sset

char

acte

ristic

s.

Cost

appr

oach

– Th

e cos

t app

roac

h ref

lects

the a

mou

nt th

at w

ould

be re

quire

d to r

eplac

e the

serv

ice ca

pacit

y of a

n ass

et at

the r

epor

ting d

ate.

Cur

rent

repl

acem

ent c

osts

have

been

deve

lope

d fro

m re

cent

ly an

alyse

d fit-

out p

rojec

ts un

derta

ken b

y the

entit

y, ot

her

gove

rnm

ent a

genc

ies an

d bui

ldin

g cos

t pub

licat

ions

such

as R

awlin

sons

and C

orde

lls. C

onsid

erat

ion h

as be

en gi

ven t

o an a

sset

s loc

atio

n, siz

e, lay

out, f

it-ou

t den

sity,

func

tion,

quali

ty an

d the

cond

ition

s of r

eleva

nt co

nstru

ctio

n mar

kets.

1. No

n-fin

ancia

l ass

ets (

NFAs

) are

valu

ed at

high

est a

nd be

st us

e.

Leve

l 1: Q

uote

d pric

es (u

nadj

uste

d) in

activ

e mar

kets

for i

dent

ical a

sset

s or l

iabili

ties t

hat t

he en

tity c

an ac

cess

at m

easu

rem

ent d

ate.

7.4

Fair

Val

ue M

easu

rem

ent

The f

ollo

wing

tabl

es pr

ovid

e an a

nalys

is of

asse

ts an

d liab

ilitie

s tha

t are

mea

sure

d at f

air va

lue.

The r

emain

ing a

sset

s and

liabi

lities

disc

lose

d in t

he st

atem

ent o

f fin

ancia

l pos

ition

do no

t app

ly th

e fair

valu

e hier

arch

y.

The d

iffer

ent l

evels

of th

e fair

valu

e hier

arch

y are

defin

ed be

low.

Acco

unti

ng P

olic

y Al

l rev

aluat

ions

are i

n acc

orda

nce w

ith th

e rev

aluat

ion p

olicy

stat

ed in

Not

e 3.2.

On 3

0 Jun

e 201

6 an i

ndep

ende

nt va

luer

, Aus

tralia

n Va

luat

ion

Solu

tion

(AVS

) con

ducte

d the

reva

luat

ions

.

Page

39 of

43



Non-financial assets

Property, plant and equipment

2016$'000

As at 1 July 883

Total gains/(losses) recognised in net cost of services1 (1,518)

Total gains/(losses) recognised in other comprehensive income2 (205)Transfer due to amalgamation 1,286 Purchases -Transfers out of Level 3 -

Total as at 30 June 446 Changes in unrealised gains/(losses) recognised in net cost of services for assets held at the end of the reporting period

-

2. These gains/(losses) are presented in the Statement of Comprehensive Income under asset revaluation surplus.1. These gains/(losses) are presented in the Statement of Comprehensive Income under Depreciation and amortisation.

7.4B: Reconciliation for Recurring Level 3 Fair Value Measurements

Page 40 of 43



8.1 Restructuring

8.1A: Restructuring

Migration Review Tribunal and

Refugee Review Tribunal

(MRT-RRT)1

Social Security Appeals Tribunal (SSAT)1 Total

$’000 $’000 $’000FUNCTIONS ASSUMED3

Assets recognisedCash and cash equivalents 12 208 220 Trade and other receivables 53,564 8,770 62,334 Leasehold improvements 4,815 3,775 8,590 Plant and equipment 1,150 529 1,679 Intangibles 2,913 1,957 4,870 Other non financial assets 62 165 227

Total assets recognised 62,516 15,404 77,920 Liabilities recognised

Suppliers 244 460 704 Other payables 5,757 3,172 8,929 Employee provisions 9,127 4,196 13,323 Other provisions 671 1,171 1,842

Total liabilities recognised 15,799 8,999 24,798 Net assets/(liabilities) recognised2 46,717 6,405 53,122 Income assumed

Recognised by the receiving entity - - -Recognised by the losing entity - - -

Total income assumed - - -Expenses assumed


Total expenses assumed - - -

as contributed equity, pending the completion of a section 75 determination.

1. On 1 July 2015, the MRT-RRT and SSAT were merged with the AAT pursuant to the Tribunals Amalgamation Act 2015. All assets, liabilities and commitments of the MRT-RRT and SSAT were transferred to the Administrative Appeals Tribunal, except for $8.9m in cash and receivable of the SSAT, which will be recognised on completion of the section 75 determination. The amalgamated AAT continues to operate as a non-corporate entity under the PGPA Act from 1 July 2015. 2. The net assets/(liabilities) from all entities were $53.1m, including $8.9m in cash and receivable of the SSAT, which has not been recognised

3. In respect of functions assumed, the net book values of assets and liabilities were transferred to the AAT for no consideration.

Other Information This section outlines the restructuring and details of asset and liabilities transferred to the AAT at amalgamation.

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8.1B: Administered - Restructuring

Migration Review Tribunal and

Refugee Review Tribunal

(MRT-RRT)1

Social Security Appeals Tribunal (SSAT)1 Total

$’000 $’000 $’000FUNCTIONS ASSUMED3

Assets recognisedCash and cash equivalents 123 - 123 Trade and other receivables 1,910 - 1,910

Total assets recognised 2,033 - 2,033 Liabilities recognised

Suppliers 524 - 524 Total liabilities recognised 524 - 524 Net assets/(liabilities) recognised2 1,509 - 1,509 Income assumed


Total income assumed - - -Expenses assumed


Total expenses assumed - - -

1. On 1 July 2015, the MRT-RRT and SSAT were merged with the AAT pursuant to the Tribunals Amalgamation Act 2015. All assets, liabilities and commitments of the MRT-RRT and SSAT were transferred to the Administrative Appeals Tribunal. The amalgamated AAT continues to operate as a non-corporate entity under the PGPA Act from 1 July 2015. 2. The net assets/(liabilities) assumed from MRT-RRT were $1.5m and SSAT did not have an administered function.3. In respect of functions assumed, the net book values of assets and liabilities were transferred to the AAT for no consideration.

Page 42 of 43



8.2 Reporting of Outcomes

Outcome 1

2016 $’000

Expenses (133,895)Total expenses (133,895)Own-source income 2,287 Total own-source income 2,287 Expenses (7,563)Total expenses (7,563)Income 26,633 Total income 26,633 Net cost/(contribution) of outcome delivery (112,538)

Assets 104,383 Total assets 104,383 Liabilities (49,407)Total liabilities (49,407)Assets 2,963 Total assets 2,963 Liabilities ( 437)Total liabilities (437)

The AAT has only one outcome which is described in the Overview note and all resources are used to deliver that outcome.

Page 43 of 43

Administrative Appeals Tribunal Annual Report 2015–16 · 2016-10-12 · Financial Statements 65...

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